Preheat the oven to 425 degrees F. Spray the muffin pan with non-stick cooking spray. Set aside
Using a handheld or stand mixer fitted with a paddle attachment, beat the butter and granulated sugar together in a large bowl on medium speed until creamed, about 2 minutes. Beat in the egg, vanilla and milk. Scrape down the sides of the bowl as needed.
Using a large rubber spatula or wooden spoon, gently stir in the flour, baking powder, cinnamon, nutmeg and salt until combined. Do not overmix.
Spoon 1 heaping tablespoon of batter into a muffin cup. Layer with 1 teaspoon of Nutella in the center and spoon another heaping tablespoon of batter on top. If the muffin cups are completely full, that is ok. They will not overflow while baking. Repeat layering batter and Nutella into each muffin tin for all 8 muffins. Fill the unused cups one-third full with water to prevent the pan from warping.
Bake at 425 degrees F for 5 minutes and then, leaving the muffins in the oven, reduce the temperature to 350 degrees F and bake for and additional 13-16 minutes, until the batter is set. Allow the muffins to cool in the pan for about 5 minutes.